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ENVIRONMENT

Norsk Hydro seals deal with Brazil over environmental dispute

Norwegian metals group Norsk Hydro said on Thursday it has reached agreement with the Brazilian authorities following a dispute over the discharge of untreated water from its aluminium factory Alunorte, the largest in the world.

Norsk Hydro seals deal with Brazil over environmental dispute
Norsk Hydro's headquarter in Oslo. Photo: Vidar Ruud/NTB Scanpix

Brazilian authorities had accused Norsk Hydro of having contaminated the Baracena municipality's waters with bauxite residues which they claimed had overflowed from a deposit basin at the Alunorte plant after heavy rainfall on 
February 16 and 17.

They slapped Norsk Hydro with two fines of 10 million reais (€2.5 million, around $3 million) each and ordered the aluminium supplier to halve its production at the site and suspend the use of the basin. 

“On September 5, Alunorte signed two agreements representing a milestone to resume normal operations at the alumina refinery in Para, Brazil,” Norsk Hydro said in a statement.

Under the terms of the two agreements signed Wednesday in Brazil, Norsk Hydro has committed to paying a total of 160 million reais in fines, investments and food coupons for local communities.

The group also pledges to pour another 150 million reais into local development projects that will benefit communities living near Alunorte.

Norsk Hydro said no timeline has yet been set for the resumption of full operations.

“Neither of the agreements signed include provisions or establishes a timeline to resume normal operations at the refinery. However, Hydro consider the agreements as an important step towards resuming operations,” theNorwegian company said.

'Completely unacceptable'

According to an institute reporting to Brazil's ministry of public health, the discharge into the local river posed risks to fishermen and other local communities living near the Amazon as the water they drink and bathe in has high levels of aluminium and heavy metals. 

Norsk Hydro denies any toxic spill, but admits there was an unauthorised discharge of untreated rainwater.

“Internal and external reviews confirm that there was no overflow from the bauxite residue deposits or harmful spills from the February rain event,” the company said.

Norsk Hydro had in March apologised for the discharge, adding that it was “completely unacceptable and in breach with what Hydro stands for”.

The company will likely benefit from a return to full production capacity, after seeing its second quarter profits hit by the Brazil dispute.

Investors welcomed news of the agreement, bringing Norsk Hydro's share price up 4.5 percent in Thursday mid-morning trading.

ENVIRONMENT

Norway rules out 2022 oil licences in unexplored areas

Norway will not grant new oil exploration licences in virgin or little-explored areas in 2022 under a political compromise on Monday that hands a modest  victory to opponents of fossil fuels.

Norway rules out 2022 oil licences in unexplored areas
A photo taken on August 30, 2021 shows the Petroleum Museum in Stavanger, Norway, built to show the history of Norway's oil exploration. Norway is the largest producer of hydrocarbons in Western Europe. In the face of the climate emergency, voices are being raised to abandon fossil fuels for good. Petter BERNTSEN / AFP

The Scandinavian country’s governing centre-left coalition supports continuing oil and gas activities but does not have a parliamentary majority, making it reliant on socialist MPs who prioritise green issues.

As part of a compromise on the draft 2022 budget, three parties agreed on Monday that Norway — Western Europe’s largest hydrocarbon producer — would not hold a 26th so-called “ordinary” concession round next year.

This mechanism has allowed oil companies to apply for exploration in previously unexplored areas of the Norwegian continental shelf since 1965.

But the deal does not rule out awarding oil licences in already heavily exploited areas.

Since the North Sea has been extensively explored, the agreement mainly concerns the Barents Sea in the Arctic

The oil industry was a major issue in legislative elections in September, indicating Norway’s growing difficulties in reconciling environmental concerns with exploiting energy resources.

In the 25th concession round in early 2021, only seven oil companies, including Equinor, Shell and Lundin, applied — the lowest number since at least 1978 according to local media.

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